Key Details of the Maharashtra ESI Act Extension

Notification Overview

The Public Health Department of Maharashtra has published Draft Notification No. PHD-12016/3/2025-PHD(R.K.V.2) dated July 29, 2025, proposing to extend ESI Act provisions to specific categories of establishments. This notification represents a partial supersession of all earlier notifications regarding employee count requirements in establishments.

Establishments Covered Under the New ESI Extension

The notification specifically targets two major sectors:

1. Educational Institutions

• Public educational institutions
• Private educational institutions
• Aided or partially aided institutions
• Institutions run by individuals, trustees, societies, or other organizations

2. Medical Institutions

• Corporate hospitals
• Joint sector medical facilities
• Trust-operated hospitals
• Charitable medical institutions
• Private ownership hospitals
• Nursing homes
• Diagnostic centers
• Pathological laboratories

ESI Act Applicability Criteria

The ESI Act provisions will apply to establishments that:

• Employ 10 or more persons currently, OR
• Have employed 10 or more persons on any day during the preceding 12 months

Geographic Coverage

The notification applies to all areas in Maharashtra where ESI Act provisions are already in force under sub-section (3) of section 1 of the Employees’ State Insurance Act, 1948.

Timeline and Implementation

Important dates:

• Notification Date: July 29, 2025
• Public Comment Period: Until August 28, 2025
• Effective Date: August 28, 2025
• Notice Period: One month as required by law

Compliance Requirements for Affected Establishments

Immediate Action Items

Educational institutions and medical establishments falling under this notification must prepare for:

1. ESI Registration with the Employees’ State Insurance Corporation
2. Employee enrollment in the ESI scheme
3. Monthly contribution payments for eligible employees
4. Compliance with ESI Act provisions including medical benefits and cash benefits

ESI Contribution Structure

Under the ESI Act:

• Employee contribution: 0.75% of wages
• Employer contribution: 3.25% of wages
• Total contribution: 4% of employee wages

Benefits for Employees Under ESI Coverage

The extension will provide significant social security benefits to employees in educational and medical sectors:

Medical Benefits

• Free medical care for employees and dependents
• Hospitalization coverage
• Specialist medical treatment
• Maternity benefits

Cash Benefits

• Sickness benefits
• Disability benefits
• Dependent benefits
• Medical bonus
• Funeral expenses

Public Consultation Process

The Maharashtra government has initiated a public consultation process allowing stakeholders to submit objections or suggestions before August 28, 2025. Comments should be sent to:

Impact on Maharashtra’s Educational and Medical Sectors

This notification represents a significant policy shift that will:

• Enhance social security coverage for thousands of employees
• Bring standardized benefits across educational and medical institutions
• Ensure uniform compliance with labor laws
• Provide financial protection to workers in these essential sectors

ESI Act Compliance Challenges and Solutions

Common Compliance Challenges

1. Registration complexities
2. Employee data management
3. Monthly return filing
4. Contribution calculations
5. Penalty avoidance

Best Practices for Smooth Transition

• Early preparation for ESI registration
• Employee communication about new benefits
• System upgrades for payroll management
• Professional guidance for compliance

Legal Framework and Authority

The notification is issued under sub-section (5) of Section 1 of the Employees’ State Insurance Act, 1948, in consultation with the Employees’ State Insurance Corporation and with Central Government approval. This ensures the extension has proper legal backing and regulatory support.

Next Steps for Establishments

For Educational Institutions

1. Assess employee count over the past 12 months
2. Prepare for ESI registration if employing 10+ workers
3. Review current benefit structures
4. Budget for ESI contributions

For Medical Institutions

1. Evaluate applicability based on employee strength
2. Understand ESI medical benefit coordination
3. Prepare compliance documentation
4. Plan implementation timeline

Expert Insights on ESI Act Extension

This notification aligns with the government’s broader objective of expanding social security coverage and ensuring comprehensive protection for workers across all sectors. The inclusion of educational and medical institutions reflects the recognition of these sectors’ importance in Maharashtra’s economy.

Frequently Asked Questions

Q: When does the ESI Act coverage become mandatory?

A: The provisions become effective from August 28, 2025, for eligible establishments.

Q: What is the employee threshold for coverage?

A: Establishments with 10 or more employees (current or in the past 12 months) must comply.

Q: Can stakeholders provide feedback on this notification?

A: Yes, objections and suggestions can be submitted until August 28, 2025.